Research On Two-stage Supply Chain Bullwhip Effect Related To Promotion

Chinese retail market grows fast, while the competition is also fierce because theselection of every retail shop is similar. Supply chain management is considered as the lastsource of reducing cost and increasing the competitiveness. Sales promotion is widely usedin retail market while it will causenegative effect according to bullwhip effect relatedresearch. So this dissertation investigates that if there is any situation which the benefitfrom promotion can offset the loss from bullwhip effect and how to decide betweenpromotion and every day low price. This dissertation qualitative analyzes the promotionbehavior and bullwhip effect and builds mathematicmodel to compute supply chain totalprofit and bullwhip effect on promotion strategy compared to everyday low price strategy.By adjusting demand-related parameters, discount-related parameters and cost-relatedparameters, a sensitive analysis is done and that proves the profit from promotion canoffset the loss from bullwhip effect in some circumstance. The conclusion extends the viewof studying bullwhip effect and let company or researcher makes well tradeoff related topromotion.